Will RIOC Board Rubber Stamp Approval of Proposed FDR Memorial Or Will They Seek Answers To Unresolved Financial & Park Maintenance Issues?

Image of Magnifying Glass from mesquiteisd.org

Here are some questions the RIOC Directors might ask during tomorrow's June 25 Board Meeting prior to voting on whether or not to approve the FDR Four Freedoms Memorial Park proposed by the Franklin & Eleanor Roosevelt Institute (FERI).

As set forth in the February 6, 2009 Conditional Designation Agreement (CDA) between FERI and RIOC, FERI was required to demonstrate a financial commitment to completion of Phase 1 of the FDR Memorial. Section 5d of the CDA provides that:

By April 15 2009, FDR LLC will provide financial commitment to RIOC (in a form that is acceptable to RIOC in its reasonable discretion including, but not limited to, cash, letter of credit, guarantees or other financial documents) that demonstrates FDR LLC's financial ability to complete Phase 1 of the FDR Project...

Ignoring the April 15 deadline, the question is whether FERI has provided such financial documentation even at this late date? According to the materials presented by FERI to the RIOC Board (the "Presentation"), funding for Phase 1 of the project is complete, having raised $9.5 million in private funds and $8.5 million in public taxpayer funds. (Page 7 of the FERI Narrative Description in the Presentation). However, further down page 7 FERI claims only approximately $5.5 million are available for Phase 1, $80,000 for Phase 2 and $750,000 for Phase 3 - even using FERI Math that does not add up to the claimed $9.5 million. Why the discrepancy in funds? Click on the image below to read page 7.

More importantly, of the $5.5 million in private funds FERI claims are available, only $1.27 million is cash on hand with $4.285 million in what are described as pledges (Exhibit 15 of the Presentation). Nothing in the Presentation about Letters of Credit, Guarantees or other financial documents as required by section 5d of the CDA. In the current economic climate of Bernie Madoff Ponzi schemes and financial recession, detailed due diligence must be done to verify that these funds are real and not a figment of FERI's imagination. Does anyone really not think that with the proposed construction time table so close for Phase 1 and needing the approval of the RIOC Board that if these claimed pledged funds were real and deliverable, they would be in the bank by now or in some other verifiable financial instrument? Click on the image below to read Exhibit 15.

The amount of private funds raised by FERI is crucial to the financing plan for Phase 1 because the $4 million allocated to the FDR memorial by NY State is expressly conditioned upon all other money being available to complete Phase 1 before the State money can be used. According to the NY State Capital Projects Appropriation, Exhibit 18 of the Presentation:

... For services and expenditures related to the construction of phase 1 of the Franklin D. Roosevelt Four Freedoms park on Roosevelt Island. No funds shall be expended from this appropriation until $4,000,000 is made available from the City of New York and $8,000,000, or however much is necessary to complete Phase 1, is certified to be in the possession of the Franklin & Eleanor Roosevelt Institute and available for expenditure.

Since NY State is requiring FERI to certify (whatever that means) that the required privately donated funds are available before releasing any State money, why should RIOC not require the same before approving the project at tomorrow's RIOC Board meeting, particularly since the CDA (5d) requires specific financial documentation? Click on the image below to read Exhibit 18.

The CDA (section 6) also requires FERI to provide a firm commitment for maintenance of the completed park. FERI claims that the letter below from NY State Park Commissioner (OPRHP) Carol Ash provides such a commitment. However, the letter does no such thing and is expressly subject to the creation of a future endowment. According to Ms. Ash:

... an endowment will be necessary in order for OHRHP to operate the Memorial. The Franklin & Eleanor Roosevelt Institute has agreed to assist OPRHP to raise the endowment. We hope to make progress on fundraising over the summer....

Click on the image below to read the full letter.

Of course the RIOC Board could just ignore these financial and park maintenance issues and rubber stamp approval of the FDR Memorial tomorrow. However, perhaps in the exercise of their fiduciary duty to RIOC , the resident Board members might ask some of these questions, not receive any clarifying answers and either reject the FERI Louis Kahn/FDR Memorial Project or at least postpone any decision until sufficient answers are provided.

Yeah, I know I'm just dreaming but surprises sometimes do happen.